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Cumberland Farms is inextricably woven into the fabric of my youth.

On school half days we’d walk “up town,” which sounds exciting, but was not. My town had no Dunkin. There was no Starbucks. There was a Cumberland Farms, and there was the parking lot in front of the Cumberland Farms, and we would loiter in that parking lot for three hours drinking slushies and eating candy and being fourteen years old with nowhere to be. Freedom.

There was a guy working the front register back then who looked exactly like Skinny Pete from Breaking Bad.

And when I recently stopped in for a snack this fall while visiting my parents, twenty years later, there he was… still standing behind the same counter ringing people up. He appears to have achieved full tenure. I hope Skinny Pete makes out like a bandit on this IPO.

My adolescence coincided with peak South Beach diet, so naturally I invented a personal variant where I ate less at lunch and drank an extra large movie theatre sized icee every day, on the theory that liquids do not count toward caloric intake. They were roughly 3,000 calories and a bajillion grams of sugar. It didn’t matter, because I was chugging them between football two-a-days in the August heat.

If you’re not from Massachusetts you don’t have the attachment. Pennsylvania has Wawa and Florida has RaceTrac. Cumbies is our version, except not as nice, and staffed by someone visibly furious to be working on a cold December, cleaning up after people trek salt in to get coffee. If you’ve seen the Casey Affleck Dunkin commercials, you could drop him into a Cumbies and not change a single frame.

Which is why the most disorienting thing in this filing is that Cumberland Farms is an absolute powerhouse in Europe.

They go by a collection of different names, but more than half its stores are over there. Scrolling the European portfolio gave me a flashback to eating chicken francese at a gas station in rural Tuscany in 2009, which was, and I need you to trust me here, excellent gas station chicken francese. Pit stops in Europe are full blown malls. Which is juxtaposition to the rubbery taquitos of my youth, rotating on a greasy pinwheel for several weeks.

So here is the Cumberland Farms S1 breakdown you probably didn’t think you needed. Stay for the fuel and snack unit economics, plus a heavy dose of private equity platform build-and-buy execution at scale.

Get a refill at the Cumbies Chill Zone and let’s get into it.

A scorecard before we drown in debt.

The company started as a single petrol forecourt (new vocab word!) in Bury, England in 2001, ate its way across three continents on borrowed money, got too heavy, sold off half of itself to survive, and is now going public under the name of a 1939 New England dairy chain it bought in 2019 (the other option was to adopt the other acquired name, Loaf ’N Jug, which can mean many things to many people).

By my count, that’s five days more than a fortnight before filing for IPO. They buried it in the corporate information section between the Cayman registered office address and the phone number. Yes there is a phone number.

The deal comes down to two things.

Snacks and gas.

Fuel is the largest source of gross profit in this company, which surprised the hell out of me. I’d always assumed gas was a doormat, priced near cost to get you through the door so you’d buy a Snickers at 40 points. It’s far from it. Gas earns about a dime on every dollar, and they sell so much of it that those dimes add up to more gross profit than everything inside the store combined.

Ok, it’s a closer race to the finish. But still.

But you can’t really look at this as a revenue company. It should be measured as a gross profit and EBITDA company. Model it top down off the $16 billion and you’ll land somewhere insane, since most of that number is the wholesale cost of gasoline passing through the register on its way back to Irving Oil. You gotta start at the $2.7 billion of gross profit and work down.

The filing uses these acronyms about 200 times and never stops to make them all that memorable, so I guess I will try here.

COCO is company-owned, company-operated. Cumberland Farms owns the site and runs it. They hire the clerk, price the gas and the Slim Jims, book all the revenue, and eat all the operating cost. This is the highest margin and highest risk, and it’s what you picture when you picture a Cumbies in the northeast.

CONCO is company-owned, not company-operated. Cumberland Farms owns the real estate and the fuel equipment, and a dealer runs the store. The company still books the fuel revenue and pays the dealer a commission on gallons. The dealer keeps the inside business to sell the snacks and stuff, and cuts a rent check. This results in a thinner slice for Cumberland Farms, and in exchange somebody else handles the guy trying to return a Fanta.

Other is a third party who owns the whole site outright. Cumberland Farms just supplies the fuel. This is a European thing, I guess, because there are no “others” in the US.

The United States is 96% COCO. Europe is 40% COCO. In America they own and run essentially everything, which is why the US carries the fat gross margins, the fat operating costs, and most of the 32,252 employees (incl. Skinny Pete). In Europe over half the network belongs to dealers, and Cumberland Farms is more akin to a fuel wholesaler.

So three pretty different companies stapled together under one ticker.

#1. Fuel procurement: They bought 2.76 billion gallons last year and have committed to buying over 6 billion more under minimum volume contracts. A refiner will cut you a better rack price if you promise to take billions of gallons off their hands on a schedule. Both sides like predictability. The small regional guy with four stations in Worcester cannot make that promise.

#2. Above-site cost: Procurement, finance, HR, fuel pricing, IT, legal, and real estate all run out of two shared service centers, one in Charlotte and one in Bolton, England. That’s a fixed cost, and spread over 3,242 stores it’s a drop in the bucket.

#3. Pricing technology: In 2025 they moved US fuel pricing onto a machine learning model that reads local conditions and prices site by site. You only build that if you’ve got thousands of sites to run it across and a real shot at pricing arbitrage. The independent guy is squinting at the sign across the street and just moving it up or down a cent based on his competition.

#4. Loyalty and retail media: Six million loyalty members generate a robust data set, and in early 2025 they started renting that data back to Coke and Frito-Lay in an advertising agreement through a partner called Axonet.

And yet… in the same year they assembled all of this data, they lost US market share. Volumes fell and they blamed their own pricing model, forcing them to reset it mid-year, and give back fuel margin to win customers back. Woops!

There are about 150,000 convenience stores in America and 63% of them belong to somebody who owns fewer than ten. When your competition is a guy with three stores and a personal guarantee on his fuel contract, you don't need to be brilliant… You need to be able to write a check. These market dynamics made it an attractive roll up opportunity from the perspective of their London PE owners.

Convenience store demand holds up against online purchasing way better than retail, as about 37% of shoppers walk into a convenience store every day and another 42% go once or twice a week. Amazon flattened most of retail but didn’t do nearly as much damage to convenience stores because the sales are made in the moment when someone isn’t at home to take a delivery.

Recessions don't do much either.

Convenience stores also sell more than 80% of the gasoline purchased in this country. Sorry, Costco.

From the filing:

Including ourselves. Lol.

Cumberland Farms is the #5 convenience operator in the United States by store count across 24 states, and #4 in Europe. That's what you can do with $5.8 billion of debt.

In the European Union, EVs were about 26% of new car sales in 2024. They were also about 4% of the cars actually on the road.

People keep a car for about a decade, so the fleet turns over slowly. The US is well behind Europe on both counts, which is a large part of why the American business is the one they're selling you in the F-1 (it’s called an F-1 since they are a foreign issuer btw, it’s not me making a typo over and over again).

Here's how they describe where fuel demand goes from here:

Net net, Cumberland Farms is long the birth rate and short electric cars.

They carry $5,788 million of debt against $693 million of Adjusted EBITDA, which is 8x. Most companies going public sit somewhere around 2x or 3x. Eight is around the range where private equity is still trying to fix the thing, not IPO it.

The stores threw off $208 million of operating income last year and the lenders took $668 million in interest, which is how you end up owing three dollars for every one you made.

And the ratio has gotten worse every year, because operating income is falling faster than they can retire the principal.

$268 million of cash at a company that rings up $16 billion of revenue is about six days of gross profit, and my first reaction was that I’d pulled the wrong line off the balance sheet.

But I don’t make mistakes. Except for that time I had gas station Sushi in Mexico.

Every dollar that comes through the register gets swept out to the revolver and the term loans, so nothing accumulates. They are managing cash flow and working capital super close to stay in their covenant good graces.

So the low cash balances are a feature, not a bug.

Over on the asset side, $4.5 billion of the $11.9 billion is goodwill, which is what piles up when you spend a decade buying companies with borrowed money. Back the goodwill out and tangible equity is deeply underwater.

If you remember from the Jersey Mikes S1 I recently wrote, they own like none of the sandwich shops. They are a franchisor and put the land and buildout and operations in the hands of their franchisees. So I had to figure out if Cumbies was actually a Real Estate Investment Trust play.

Gas stations sit on valuable corners, and a comp of Cumbies, Casey’s, trades at a premium partly because it owns its own dirt. So I opened this filing expecting to find a couple billion dollars of unencumbered real estate waiting for a PropCo spin out or something.

Except they already ran this play (and it didn’t play out). In May 2023 they sold 414 US properties in a sale-leaseback, took $1,455 million of cash, and booked a $920 million gain that flows straight into the 2023 net income line.

So when you see $1,880 million of net income in 2023 and think this company used to make money, most of that came from selling the land and buildings, and the cash went to lenders before anybody got to enjoy it.

Yea, so not a real estate play unfortunately.

Here’s what they’re trying to do. The IPO raises about a billion. Add in the recent Australia store divestitures for $830 million, and all of it goes to the term loans, and leverage lands somewhere around 5.5x. Plenty of retailers run at 5.5x and nobody goes crazy.

Then you notice they were still borrowing on the way to the printer. They took a $550 million term loan add-on in April 2026 and another €500 million in June, nine days before the name change. Both landed after the March 31 balance sheet in this filing, so the $5,788 million is already out of date.

Even if the paydown goes exactly to plan, $4 billion of remaining debt at their blended rate still costs north of $400 million a year of interest against $208 million of operating income.

Which only pencils if the growth story delivers, and that is a lot of weight to hang on gas station fried chicken (the Fall River, MA version of chicken francese).

One line in this P&L swings $150 million, and it’s not fuel related

Some of the debt is denominated in euros while the company reports in dollars, so every quarter they remeasure that euro debt back into dollars and run the difference through the income statement. It produced a $152 million gain in FY2025, a $150 million gain in Q2 2025, and a $51 million loss in Q1 2026.

It’s a translation exercise, and it’s going to make the first year of public earnings look erratic for non operational reasons.

Ok, finally we can talk about the growth story they’re selling.

The US business operates under a garage sale of names: Tom Thumb, Sprint, Turkey Hill, Minit Mart, Certified Oil, and our old friend Loaf 'N Jug. So after a decade of acquisitions, they still need to paint alotta signs.

Per the filing, 600 to 700 of them become Cumberland Farms over five years, about 130 a year, at $250K to $520K of capex per store, targeting a return north of 20%. They've done 77 so far, mostly Tom Thumbs in Florida and Sprints in Georgia and South Carolina, with the 101 Loaf 'N Jugs in Colorado on deck.

As you can tell, I have real affection for this brand, having spent my adolescence loitering in front of one. But that affection ends somewhere around Hartford, CT. Nobody in Pueblo, Colorado is driving an extra mile for a Cumberland Farms. They haven’t heard of it. So jury is still out on this rebrand strategy.

Krispy Krunchy is in 31 stores today and they want it in 500 by 2030. A fryer runs $150,000 and a mature store throws off $300K to $400K of incremental sales at a 50%+ margin. Stores with chicken do 6% more inside sales and 9% more fuel volume, because the guy driving over for a three piece tops off the tank while he's there.

Spend $150K, get back roughly $175K of gross profit a year. The best capital allocation decision in this document is fried chicken (CFOs take note).

120,000 cups a day (no wonder why the bathrooms are so abominable) under a house blend called Farmhouse, and it's the largest piece of their US food business.

Not to state the obvious, but coffee is addictive. This brings people in on a habitual schedule on their way to work and is a gateway purchase to also buy other stuff.

SmartRewards had 300,000 members in March 2025. Thirteen months later it had 6 million, and the filing mentions it with about as much fanfare as the office address in Grand Cayman.

Members buy 5% more fuel per fill up, spend 5% more inside, and buy 49% more tobacco (which, sure). They're a quarter of all transactions now. Inside sales tied to loyalty went from $8 million to $74 million, and six million identified shoppers forms a valuable data set you can rent back to Coke, which is what Walmart and Kroger turned into billion dollar ad businesses (Cumbies, take note).

A program that goes 20x in a year usually got there by handing something out, and if that something was cents off a gallon (it was) then these six million people are worth less than the number says, because they were bought. Promotional spend per member is not in this document. Neither is how many of the six million have opened the app since.

Internal control has five components in the way it’s measured. Most companies that cop to a material weakness cop to one. Maybe two if it’s a rough year.

In their own F-1:

Five for five. High score! Winner winner Cumbies fried chicken dinner!

CEO Russell Colaco was the CFO until he got the corner office in April 2025. CFO Mark Segal started July 2025. The Chief Legal Officer came in June 2025, the Chief Accounting Officer in October 2025, and the Chief People Officer in January 2026.

Every executive whose name is on this document has been in the chair for about a year, at a company with material weaknesses, going public at 8x leverage. The people who have to fix the plumbing also just found out where the bathroom is.

Tucked into the related party footnotes: $127 million of interest income in FY2025 from loans Cumberland Farms made to its own Parent.

(SONIA is not my ex gf, it is the Sterling Overnight Index Average (SONIA))

That is 18% of Adjusted EBITDA earned by lending money upstairs to the guys who control the company.

Their P+ tier (122,000 members) is paid for by Altria. Loyalty members buy 49% more tobacco than everyone else. Tobacco is roughly 10% of revenue.

And the growth comes from Benelux, because the Netherlands banned cigarette sales in supermarkets in July 2024 and pretty much forced smokers in the country to start shopping at convenience stores. Good for business.

The trifecta.

No 10-Qs. No 8-Ks. No Reg FD. The annual report is due four months after year end instead of 75 days. EG Group keeps voting control after the offering, so there is no proxy fight, no activist, and nobody is ever changing this board. And the company is incorporated in the Cayman Islands, so if you ever want to sue, pack a bag.

Their largest fuel supplier is 31% of total cost, and they’ve committed to buying 6,492 million gallons under minimum volume contracts.

Financials run through March 31, 2026. Since then they took a $550 million term loan in April and another €500 million in June.

EG Group is the rollup entity. It bought all these gas stations, and it’s what this company was called until last month.

Two parties built EG and will keep control after the IPO.

The first is TDR Capital, a London private equity firm with about €16 billion under management, which also owns Asda, a large European supermarket.

The second is the Issa brothers, Mohsin and Zuber, who started this whole thing. They bought a single petrol station in Bury, England in 2001 and never stopped. TDR merged its own forecourt business with theirs in 2016, and the combined thing became EG Group.

Then they went shopping: About 760 convenience sites from Kroger, 570 Cumberland Farms stores, 540 Woolworths sites in Australia, and over 2,000 Esso sites across Italy and Germany.

Since 2023 they’ve been selling a lot back. The UK for more than $3 billion, Italy for $450 million, Australia for $830 million, France is currently in escrow. Buy the world on debt, sell half the world to pay the interest! The American, and now European, way!

What’s left is what you’re buying: America, Germany, Benelux. And that parent entity named EG Group Limited sits above you and keeps the votes.

The comp set here is thin.

Wawa is private. Sheetz is private. So are QuikTrip, Buc-ee’s, and RaceTrac. They’re all family owned or employee owned. So when you go looking for a comparable company, the four you’re left with are Casey’s, Couche-Tard (which is Circle K), Murphy USA (the kiosk in the Walmart parking lot), and a levered rollup called ARKO that nobody talks about bc it’s no bueno.

They’re asking for roughly $9 billion of equity on a $1 billion raise.

Tack on the $5.8 billion of net debt and you’re paying $14.8 billion of enterprise value for $693 million of Adjusted EBITDA, which is 21x.

Casey’s is the biz bankers want you to compare them to. It’s trading at 24x against a ten year median of 11.5x because it grew EBITDA 24% last year and its prepared food operation runs like a well oiled QSR.

Then there’s ARKO, which I’d argue is the closer read on what Cumberland Farms actually is. Which is unfortunate for Cumberland Farms.

ARKO is a rollup of regional convenience brands nobody outside a three mile radius has heard of, and it’s levered at about 8x. It also lost money last quarter, and it’s busy converting company-operated stores to dealer-operated stores, which is the exact COCO to CONCO move going down in this filing. It also franchises fried chicken. And leans on a loyalty program. And in February it took a subsidiary public and used $206.7 million of the proceeds to pay down debt, which is also what you are being asked to fund here. Eerily similar.

ARKO trades at 11.5x, and the entire company is worth less than a billion dollars.

So they want another $6.8 billion on top of what the market pays for a company that looks like this one.

Perhaps the gap is made up in childhood nostalgia, slushies, and scratch tickets.

None of this is investment advice. I write this from my home office, hyped up on stale AF Cumberland farms coffee.

Wishing you an IPO with ample float and a working hold-open clip at the gas station,

CJ

Wishing you trade at a high revenue and EBITDA multiple,

CJ